Correct. Not an actual literacy test but a tool of oppression. (For a less blatant example at a much higher level, see "Jewish problems".)

I suggest that the history of this sort of thing is part of why the response to "hey, it turns out black people do worse than white people on IQ tests" is often to suggest that there's something very, very wrong with the tests. I mention this only because it's a topic that comes up every now and then on LW.

[EDITED to add: I should reiterate that I'm not suggesting any such sinister motive in the present case!]